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Kazakhstan has set contractor profitability at 25% in its calculations of IT system development costs for government agencies. The updated methodology takes effect on November 10 and sets out which expenses go into government digital projects (kursiv.media).
What happened
Minister of Artificial Intelligence Zhaslan Madiyev signed Order No. 637/НҚ, dated October 28, 2026. The methodology factors in developers’ salaries and the complexity of the system. Project timelines and inflation also affect the calculation.
The methodology sets rates of 71.5% for overheads, 48% for period expenses and 25% for profitability. Overheads include office rent, for example. Period expenses include administrative staff pay and marketing.
Here is an important detail: these percentages cannot simply be added together and tacked onto the price of a government contract. They are applied within the calculation methodology. The starting point is the average salary of a software engineer for the most recent completed year, based on Bureau of National Statistics data.
What this means for development costs
The calculation has seven stages, from assessing what the future system will be able to do to determining the final cost. It covers work from business process modelling and gathering requirements through to deployment. Design and coding are also included, with testing calculated separately.
The number of users and information security requirements affect the cost. Resilience to failures and information processing speed are also taken into account. Separate coefficients apply to systems on which human lives depend, as well as systems supporting national security and social stability.
Shorter development timelines can also increase the estimated labour required. The average inflation rate over the previous three years is used to adjust for rising prices.
How equipment and support costs are justified
The cost of a digital project can include hardware and software, as well as project management and cybersecurity and quality testing. Buying or renting hardware and software requires quotes from at least two suppliers. If no quotes are available, the methodology requires at least two independent valuation reports.
A 15% labour intensity coefficient applies to support for completed software. It is used alongside other indicators to calculate technical support costs. These can cover bug fixes and maintenance, user assistance and support for licensed software.
Adding new features or making substantial changes to a system counts as an upgrade and is calculated separately. In February 2026, President Kassym-Jomart Tokayev criticised spending on the digitalisation of government agencies. He demanded that fragmented systems be brought together on the QazTech platform without huge additional budget spending.
